L’Oréal To Close Some Stores, Cut 400 Jobs
PARIS — L’Oréal SA recently announced that it plans to close retail locations to restructure its US luxury operations as the company grapples with severe changes to consumer behavior amid the pandemic.
The Luxe Division of L’Oréal USA plans to shift investment to growth areas such as e-commerce as part of the reorganization over the next six months, the company said Thursday in a statement in response to inquiries from Bloomberg.
The shares rose 0.7 percent early Friday in Paris and they’re up 6 percent so far this year.
L’Oréal said as many as 400 roles in the Luxe Division would be affected in the US, the company’s biggest market. Some will have a chance to move to another position. It didn’t say how many stores would close.
“Modernizing its current distribution footprint is necessary for rebuilding the organization around the future of the consumer,” the company said. “Luxury consumer behavior in the US has fundamentally evolved, and L’Oréal USA will be evolving its business to meet these new consumer expectations and preferences.”
The French company, which employs about 88,000 people worldwide, has been struggling through the coronavirus pandemic as people around the world are spending less on pricey perfumes and makeup as there are fewer occasions for social interaction during lockdowns. Even though its e-commerce grew 65 percent in the first half of the year as consumers treated themselves to fancy things while stuck at home, it wasn’t enough to offset the decrease in overall demand for beauty products and services. Comparable sales dropped 19 percent last quarter.
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